1999 Department of the Treasury Internal Revenue Service Instructions for Form 1042-S Foreign Person's U.S. Source Income Subject to Withholding Section references are to the Internal Revenue Code unless otherwise noted. General Instructions A Change To Note A new Form W-8 series is replacing the current Form W-8, Certificate of Foreign Status; Form 1001, Ownership, Exemption, or Reduced Rate Certificate; Form 4224, Exemption From Withholding of Tax on Income Effectively Connected With the Conduct of a Trade or Business in the United States; and Form 8709, Exemption From Withholding on Investment Income of Foreign Governments and International Organizations. The new forms consist of the following: l  Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding (replacing Forms W-8 and 1001). l  Form W-8ECI, Certificate of Foreign Person's Claim for Exemption From Withholding on Income Effectively Connected With the Conduct of a Trade or Business in the United States (replacing Form 4224). l  Form W-8EXP, Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding (replacing Form 8709). l  Form W-8IMY, Certificate of Foreign Intermediary, Foreign Partnership, or Certain U.S. Branches for United States Tax Withholding. In 1999, you may accept either the current or the new forms from foreign recipients of income subject to withholding.   If the current forms are filed with you on or after January 1, 1999 and before January 1, 2000, they will expire on the earlier of their normal expiration date or December 31, 2000. Therefore, you should encourage income recipients to use the new series of Forms W-8 instead of the existing forms in order to secure the maximum period of validity. For details, see the Instructions for the Requester of Forms W-8BEN, W-8ECI, W-8EXP, and W-8IMY. Purpose of Form Complete Form 1042-S to report income subject to withholding under section 1441 or 1442 (and Regulations section 1.1445-8) paid to nonresident aliens, foreign partnerships, foreign corporations, or nonresident alien or foreign fiduciaries of estates or trusts. Form 1042-S is also used by publicly traded partnerships who must pay a tax under section 1446 by withholding from distributions to foreign partners. Copy A is filed with the Internal Revenue Service. Copies B, C, and D are for the recipient. Copy E is for your records. Who Must File Every U.S. withholding agent who receives, controls, has custody of, disposes of, or pays a fixed or determinable annual or periodic income, must file Form 1042-S to report all items of income described under Income Subject to Withholding on page 2, except income that is required to be reported on Form W-2. You must file a Form 1042-S even if: 1. You did not withhold tax because the income was exempt from tax under a U.S. tax treaty or the Code, including the exemption for income effectively connected with the conduct of a trade or business in the United States, or 2. You released the tax withheld to the recipient. For exceptions, see Income Exempt From Withholding on page 2. Income from sources within the United States paid to residents of U.S. possessions and territories is not subject to reporting or withholding under section 1441 if the recipient is a U.S. citizen, national, or resident alien. Note:   If you are required to file Form 1042-S, you must also file Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons. Get Form 1042 for more information. Who Is a Withholding Agent Any person required to withhold the tax is a withholding agent. A withholding agent may be an individual, trust, estate, partnership, corporation, government agency, association, or tax-exempt foundation, whether domestic or foreign. Canadian withholding agent.   If you are a nominee, representative, fiduciary, or partnership in Canada and you receive dividends from sources in the United States for the account of any person who is not entitled to the reduced rate granted under the tax treaty between the United States and Canada, you are a withholding agent.   You must withhold the additional tax due on the income.   Send the additional U.S. tax withheld, in U.S. dollars, with Form 1042 to the Internal Revenue Service Center, Philadelphia, PA 19255, by March 15, 2000. Where and When To File File any paper document Forms 1042-S with Form 1042 with the Internal Revenue Service Center, Philadelphia, PA 19255, by March 15, 2000. You are also required to furnish Form 1042-S to the recipient of the income. If you have 250 or more Forms 1042-S to file, see Magnetic Media/Electronic Reporting on this page. Extension of time to file.   To request an extension of time to file Forms 1042-S (paper, magnetic media, or electronically), send Form 8809, Request for Extension of Time To File Information Returns, to the address shown on Form 8809. You must request the extension by the due date for filing Form 1042-S for your request to be considered.   If your request for an extension is approved, you will have an additional 30 days to file. You may request an additional extension. Get Form 8809 for more information. Note:   If you are a magnetic media transmitter requesting extensions of time to file for more than 50 withholding agents or payers, you must submit the extension requests magnetically or electronically. For instructions on submitting extension requests on magnetic media, see Pub. 1187, Specifications for Filing Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding. Magnetic Media/Electronic Reporting You must use magnetic media if you are required to file 250 or more Forms 1042-S. Acceptable forms of magnetic media are magnetic tape, tape cartridge, and  3¹/2-  and  5¹/4-inch  diskettes.   Pub. 1187 is the revenue procedure for magnetic media and electronic reporting. Cat. No. 64278A